Notice of Annual General Meeting 2014

Notice of Annual General Meeting 2014
This document is important and requires your immediate attention. If you have any doubts about the
action you should take, you should consult your stockbroker, bank manager, solicitor, accountant,
or other professional independent adviser authorised under the Financial Services and Markets Act
2000. If you have sold or otherwise transferred all of your shares, please pass this document and its
enclosures to the stockbroker or other agent through whom the sale was effected, for transmission
to the purchaser or transferee.
Dear Shareholder
The following document gives notice that the Annual General Meeting (‘AGM’) of Diageo plc will be
held at The Mermaid Conference & Events Centre, Puddle Dock, Blackfriars, London EC4V 3DB on
Thursday, 18 September 2014 at 2.30 pm.
Your vote is important to us and, if you are unable to attend the meeting, you can still vote by completing
and submitting a proxy form in accordance with the instructions on page 13. Voting at the AGM will again
be by way of poll using a poll card, rather than on a show of hands. This is a more transparent method
of voting as shareholder votes are counted according to the number of shares held. This will ensure an
exact and definitive result.
In line with the new remuneration legislation, this year the remuneration report is split into two sections
and the policy on Directors’ remuneration for the next three years, contained within the remuneration
report, will be subject to a binding shareholder vote. There is also a resolution proposing a new long term
incentive plan, which will replace the existing plans and is designed to simplify the existing incentive
arrangements and further align them with both the interests of shareholders and the company’s
business strategy.
Recommendation
The Board considers that the resolutions contained in this AGM notice are in the best interests of your
company and shareholders as a whole and recommends that you vote in favour of them. Your Directors
intend to vote in favour of these resolutions in respect of their own beneficial holdings.
Yours sincerely
Dr Franz B Humer
Chairman
15 August 2014
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Diageo Notice of Annual General Meeting 2014
Declaration of final dividend
Notice is hereby given that the AGM of Diageo plc
will be held at The Mermaid Conference & Events
Centre, Puddle Dock, Blackfriars, London EC4V 3DB
on Thursday, 18 September 2014 at 2.30 pm.
4. THAT a final dividend be declared on
the ordinary shares of 28 101/108 pence each
(‘Ordinary Share(s)’) of 32.00 pence per share
for the year ended 30 June 2014.
The business of the AGM will be to consider and,
if thought fit, pass the following resolutions.
Directors’ re-election
5.
6.
7.
8.
9.
10.
11.
12.
13.
All resolutions will be proposed as ordinary
resolutions, save for 19 and 20, which will be
proposed as special resolutions. Explanations
of the resolutions are given on pages 6 to 12 of
this AGM notice and additional information for
those entitled to attend the AGM can be found
on pages 12 to 16.
THAT PB Bruzelius be re-elected as a director.
THAT LM Danon be re-elected as a director.
THAT Lord Davies be re-elected as a director.
THAT Ho KwonPing be re-elected as a director.
THAT BD Holden be re-elected as a director.
THAT Dr FB Humer be re-elected as a director.
THAT D Mahlan be re-elected as a director.
THAT I Menezes be re-elected as a director.
THAT PG Scott be re-elected as a director.
Report and accounts 2014
Directors’ election
1. THAT the Directors’ and Auditor’s reports and
the accounts for the year ended 30 June 2014
be received.
14. That NS Mendelsohn be elected as a director.
15. THAT AJH Stewart be elected as a director.
Directors’ remuneration report 2014
Re-appointment of auditor
2. THAT the Directors’ remuneration report
(excluding the Directors’ remuneration
policy) for the year ended 30 June 2014
be approved.
16. THAT KPMG LLP be re-appointed as auditor
of the company to hold office from the
conclusion of this AGM until the conclusion
of the next general meeting at which
accounts are laid before the company.
Directors’ remuneration policy
Remuneration of auditor
3. THAT the Directors’ remuneration policy as
set out on pages 65 to 70 of the Diageo plc
report and accounts for the year ended
30 June 2014 be approved.
17. THAT the Board be authorised to determine
the auditor’s remuneration.
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Diageo Notice of Annual General Meeting 2014
Authority to allot shares
Disapplication of pre-emption rights
18. THAT the Board be generally and
unconditionally authorised to allot shares in
the company and to grant rights to subscribe
for or convert any security into shares in the
company up to an aggregate nominal amount
of £242,298,000 and so that the Board may
impose any limits or restrictions and make any
arrangements which it considers necessary
or appropriate to deal with treasury shares,
fractional entitlements, record dates, or legal,
regulatory or practical problems in, or under
the laws of, any territory or any other matter
(including any such problems arising by
virtue of equity securities (as defined in
the Companies Act 2006 (the ‘Act’)) being
represented by depositary receipts), such
authorities to apply until the conclusion of
next year’s AGM (or, if earlier, until the close
of business on 17 December 2015) save that
under such authority the company may,
before such expiry, make an offer or agreement
which would or might require shares to be
allotted or rights to subscribe for or convert
any security into shares to be granted after
such expiry and the Directors may allot shares
or grant rights to subscribe for or convert any
security into shares in pursuance of such an
offer or agreement as if the relevant authority
conferred hereby had not expired.
19. THAT, if resolution 18 is passed, the Board be
given power to allot equity securities for cash
under the authority given by that resolution
and/or to sell Ordinary Shares held by the
company as treasury shares for cash, in each
case free of the restriction in section 561(1)
of the Act, such power to be limited:
a)to the allotment of equity securities
and sale of treasury shares for cash in
connection with an offer of, or invitation
to apply for, equity securities:
i.to ordinary shareholders in proportion
(as nearly as may be practicable) to their
existing holdings; and
ii.to holders of other equity securities,
as required by the rights of those
securities, or as the Board otherwise
considers necessary,
and so that the Board may impose
any limits or restrictions and make any
arrangements which it considers necessary
or appropriate to deal with treasury shares,
fractional entitlements, record dates, or legal,
regulatory or practical problems in, or under
the laws of, any territory or any other matter
(including any such problems arising by virtue
of equity securities being represented by
depositary receipts); and
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Diageo Notice of Annual General Meeting 2014
b)in the case of the authority granted under
resolution 18 and/or in the case of any sale
of treasury shares for cash to the allotment
(otherwise than under paragraph (a) above)
of equity securities or sale of treasury shares
up to a nominal amount of £39,846,000; and
c)to the allotment of equity securities in
connection with the company’s employee
share plans and the company’s employee
share option plans for employees of joint
ventures in which the company and/or any
of its subsidiary undertakings (as defined
in the Act) participates,
a)the maximum number of Ordinary Shares
hereby authorised to be purchased is
251,215,000; and
b)the minimum price, exclusive of expenses,
which may be paid for an Ordinary Share
is 28 101/108 pence; and
c)the maximum price, exclusive of expenses,
which may be paid for an Ordinary Share
is the higher of:
i.an amount equal to 105% of the average
of the middle market quotations for an
Ordinary Share (as derived from the London
Stock Exchange Daily Official List) for the
five business days immediately preceding
the day on which that Ordinary Share is
contracted to be purchased; and
such power to apply until the conclusion of
next year’s AGM (or, if earlier, until the close of
business on 17 December 2015) save that the
company may, before such expiry, make an offer
or agreement which would or might require
equity securities to be allotted after such expiry
and the Directors may allot equity securities
in pursuance of such an offer or agreement
as if the relevant authority conferred hereby
had not expired.
ii.the higher of the price of the last
independent trade and the highest
current independent bid on the London
Stock Exchange at the time the purchase
is carried out; and
Authority to purchase own Ordinary Shares
20. THAT the company be authorised for the
purposes of section 701 of the Act to make one
or more market purchases (within the meaning
of section 693(4) of the Act) of its Ordinary Shares
on such terms and in such manner as the Board
may from time to time determine but subject
to the following restrictions and provisions:
4
d)unless previously revoked or varied, this
authority will expire at the conclusion of
next year’s AGM or on 17 December 2015,
whichever is the sooner, save that the
company may, before such expiry, enter
into a contract for the purchase of Ordinary
Shares which would or might be completed
wholly or partly after such expiry and the
company may purchase Ordinary Shares
pursuant to any such contract as if this
authority had not expired.
Diageo Notice of Annual General Meeting 2014
Authority to make political donations and/or
to incur political expenditure in the European
Union (‘EU’)
Adoption of the Diageo 2014 Long Term
Incentive Plan
22. THAT the Diageo 2014 Long Term Incentive
Plan (the ‘DLTIP’), the principal terms of which
are summarised in the Appendix to this AGM
notice, and the rules of which are produced
to the meeting and initialled by the Chairman
for the purposes of identification, be
approved and the Directors be authorised
to establish such schedules to the DLTIP as
they may consider necessary in relation to
employees outside the UK, with such
modifications as may be necessary or
desirable to take into account of local tax,
exchange control or securities law in overseas
territories, provided that any shares made
available under such schedules are treated as
counting against the limits on individual and
overall participation contained in the DLTIP.
21. THAT, in accordance with sections 366 and 367
of the Act, the company and all companies that
are at any time during the period for which
this resolution has effect subsidiaries of the
company be authorised to:
a)make political donations (as defined in
section 364 of the Act) to political parties
(as defined in section 363 of the Act) or
independent election candidates (as
defined in section 363 of the Act), not
exceeding £100,000 in total; and
b)make political donations (as defined
in section 364 of the Act) to political
organisations other than political parties
(as defined in section 363 of the Act) not
exceeding £100,000 in total; and
c)incur political expenditure (as defined in
section 365 of the Act) not exceeding
£100,000 in total;
By order of the board
Paul D Tunnacliffe
Company Secretary
15 August 2014
in each case during the period beginning
with the date of passing this resolution and
ending at the end of next year’s AGM or on
17 December 2015, whichever is the sooner,
and provided that the aggregate amount of
political donations and political expenditure
so made and incurred by the company and
its subsidiaries pursuant to this resolution
shall not exceed £100,000.
Diageo plc
Registered office:
Lakeside Drive
Park Royal
London
NW10 7HQ
Registered in England No. 23307
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Diageo Notice of Annual General Meeting 2014
Explanatory notes to the resolutions
Resolution 4 (declaration of final dividend)
The company paid an interim dividend of
19.70 pence per Ordinary Share in April 2014.
The Board recommends a final dividend of
32.00 pence per Ordinary Share, bringing the
total dividend for the year to 51.70 pence per
Ordinary Share. Subject to approval by shareholders,
the final dividend will be paid on 2 October 2014 to
shareholders on the Register on 15 August 2014.
Resolution 1 (report and accounts 2014)
These Diageo plc reports and accounts are for the
year ended 30 June 2014.
Resolution 2 (Directors’ remuneration
report 2014)
Sections 439 and 440 of the Act require that
quoted companies put the Directors’
remuneration report to a vote of the shareholders.
The vote is advisory only, however, and the
Directors’ entitlement to remuneration is not
conditional on the resolution being passed.
A Dividend Re-investment Plan (‘DRIP’) is available
in respect of this dividend and the plan notice date
is 10 September 2014. A DRIP booklet and mandate
form are available from the Registrar at the address
given in note 4 on page 13 of this AGM notice or
from the company’s website (www.diageo.com).
Resolution 3 (Directors’ remuneration policy)
Resolution 3 is a new resolution to approve the
Directors’ remuneration policy as set out in the
Directors’ remuneration report on pages 65 to 70
of the Diageo plc‘s report and accounts for the year
ended 30 June 2014, available from the company’s
website (www.diageo.com). This new resolution
has been introduced by the Large and Mediumsized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013 (‘Regulations’)
which took effect from 1 October 2013.
Resolutions 5-15 (directors seeking election
and re-election)
The company’s articles of association provide that
any director who has been appointed by the Board
since the last AGM is required to retire and may then
be considered for election assuming they wish to
stand for election. The directors appointed since
the last AGM are Nicola S Mendelsohn and Alan
JH Stewart, who are both seeking election. Nicola
Mendelsohn has extensive experience at the
forefront of digital marketing and communications.
Alan Stewart has a strong track record in accountancy
and financial management together with experience
in retail, travel and the banking industries. The
Board believes the experience of both will be of
great value to Diageo as we continue to focus on
driving long-term profitable growth through
innovation in all areas of our business.
The vote on the Directors’ remuneration policy is
binding and accordingly the company may not
make a remuneration payment or payment for
loss of office to a person who is, or is to become,
or has been a director of the company unless that
payment is consistent with the approved Directors’
remuneration policy, or the arrangement pre-dates
27 June 2012 (as specified in the Regulations) or
has otherwise been approved by a resolution of
shareholders. If resolution 3 is passed, the Directors’
remuneration policy will take effect immediately.
A remuneration policy will be put to shareholders
again no later than the company’s AGM in 2017.
In accordance with the UK Corporate Governance
Code and with previous years, all of the other
Directors of the company will stand for
re-election. In relation to the re-election of
Non-Executive Directors, Peggy B Bruzelius,
Laurence M Danon, Lord Davies of Abersoch,
Ho KwonPing, Betsy D Holden and Philip G Scott,
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Diageo Notice of Annual General Meeting 2014
Lord Davies of Abersoch
Appointed Senior Non-Executive Director and
Chairman of the Remuneration Committee,
October 2011 (Appointed Non-Executive
Director, September 2010)
the Chairman has confirmed that the Board has
determined that each of them is independent,
continue to perform effectively and demonstrate
commitment to their roles, and that they are all
influential individuals in their respective fields,
backgrounds and countries.
Current external appointments: Partner and Vice
Chairman, Corsair Capital LLC; Chairman, Chime
Communications PLC; Non-Executive Chairman,
Pinebridge Investments Limited; Chair, Global
Advisory Board of Moelis & Company; Trustee,
Royal Academy of Arts; Chair of the Council,
University of Wales Bangor.
Previous relevant experience: Non-Executive
Director, Bharti Airtel Limited; Minister for Trade,
Investment and Small Business for the UK
Government; Chairman, Standard Chartered PLC.
Age: 61
Nationality: British
(Committees: 1, 3, 4*)
Their balance of knowledge and skills and their
diversity and business experience are major
contributors to the proper functioning of the
Board and its committees. Biographical details
of the company’s Directors seeking re-election
and election are set out below:
Peggy B Bruzelius
Appointed Non-Executive Director, April 2009
Current external appointments: Chairman,
Lancelot Asset Management; Non-Executive
Director, Akzo Nobel NV, Axfood AB, Lundin
Petroleum AB and Skandia Liv AB.
Previous relevant experience: Non-Executive
Director, Syngenta AG and Scania AB; Managing
Director, ABB Financial Services AB; Head of the
Asset Management Arm, Skandinaviska Enskilda
Banken AB.
Age: 64
Nationality: Swedish
(Committees: 1, 3, 4)
Ho KwonPing
Appointed Non-Executive Director, October 2012
Current external appointments: Executive
Chairman and Founder, Banyan Tree Holdings
Limited; Chairman, Laguna Resorts & Hotels Public
Company Limited, Thai Wah Food Products Public
Company Limited and Singapore Management
University; Member, International Council and
East Asia Council of INSEAD; Member, Global
Advisory Board of Moelis & Company; Governor,
London Business School.
Previous relevant experience: Chairman,
MediaCorp Pte. Ltd; Non-Executive Director,
Singapore Airlines Limited, Standard Chartered
PLC and Singapore Power Limited.
Age: 61
Nationality: Singaporean
(Committees: 1, 3, 4)
Laurence M Danon
Appointed Non-Executive Director, January 2006
Current external appointments: Chairman,
Leonardo & Co. SAS; Non-Executive Director, TF1.
Previous relevant experience: Served with the
French Ministry for Industry and Energy; senior
managements posts, Total Fina Elf; Chairman
and Chief Executive Officer, France Printemps;
Chairman, Executive Board of Edmond de
Rothschild Corporate Finance; Non-Executive
Director, Experian Group Limited, Groupe BPCE,
Plastic Omnium SA and Rhodia SA.
Age: 58
Nationality: French
(Committees: 1, 3, 4)
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Diageo Notice of Annual General Meeting 2014
Betsy D Holden
Appointed Non-Executive Director, September 2009
Deirdre Mahlan
Appointed Chief Financial Officer and
Executive Director, October 2010
Current external appointments: Senior Advisor,
McKinsey & Company; Non-Executive Director,
Catamaran Corporation, Western Union
Company and Time Inc.; Member of the Board of
Trustees, Duke University; Member of the
Executive Committee, Kellogg School of
Management Global Advisory Board.
Previous relevant experience: Member of the
North American Advisory Board, Schneider
Electric; Non-Executive Director, Tribune
Company; President, Global Marketing and
Category Development and Co-Chief Executive
Officer, Kraft Foods, Inc.
Age: 58
Nationality: American
(Committees: 1, 3, 4)
Current external appointments: Non-Executive
Director, Experian plc; Member, Main Committee
of the 100 Group of Finance Directors.
Previous Diageo roles: Deputy Chief
Financial Officer; Head of Tax and Treasury.
Previous relevant experience: senior finance
positions, Joseph E. Seagram & Sons, Inc.;
senior manager, PricewaterhouseCoopers.
Age: 52
Nationality: American
(Committee: 2)
Ivan Menezes
Appointed Chief Executive, July 2013
(Appointed Executive Director, July 2012)
Current external appointments: Non-Executive
Director, Coach Inc.
Previous Diageo roles: Chief Operating Officer;
President, North America; Chairman, Diageo Asia
Pacific; Chairman, Diageo Latin America and
Caribbean; senior management positions,
Guinness and then Diageo.
Previous relevant experience: marketing and
strategy roles, Nestlé, Booz Allen Hamilton Inc.
and Whirlpool.
Age: 55
Nationality: American/British
(Committee: 2*)
Dr Franz B Humer
Appointed Chairman, July 2008
(Appointed Non-Executive Director, April 2005)
Current external appointments: Chairman,
INSEAD Board of Directors; Non-Executive
Director, CitiGroup Inc.
Previous relevant experience: Chairman,
F. Hoffman-La Roche Ltd; Chief Operating
Director, Glaxo Holdings plc.
Age: 68
Nationality: Swiss/Austrian
(Committee: 3*)
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Diageo Notice of Annual General Meeting 2014
Philip G Scott
Appointed Non-Executive and Chairman of
the Audit Committee, October 2007
Key to committees
1 Audit
2 Executive (comprising senior management)
3 Nomination
4 Remuneration
* Chairman of committee
Current external appointments: Non-Executive
Director, Royal Bank of Scotland Group plc.
Previous relevant experience: President, Institute
and Faculty of Actuaries; Chief Financial Officer,
Aviva plc.
Age: 60
Nationality: British
(Committees: 1*, 3, 4)
Copies of the Directors’ service contracts
(or, where appropriate, letters of appointment)
are available for inspection during normal
business hours at the company’s registered office
on any business day, and will be available at the
place where the AGM is being held from at least
15 minutes prior to, and during, the AGM.
Nicola S Mendelsohn
Appointed Non-Executive Director,
September 2014
Current external appointments: Vice President,
Facebook EMEA; Director, Women’s Prize for Fiction;
Co-Chair, Creative Industries Council.
Previous relevant experience: Executive Chairman,
Karmarama; Deputy Chairman, Grey London;
Board Director, BBH and the Fragrance Foundation;
President, Institute of Practitioners in Advertising;
board member, CEW; Trustee, White Ribbon
Alliance and Chair of the Corporate Board,
Women’s Aid.
Age: 42
Nationality: British
(Committees: 1,3,4)
Resolution 16 (re-appointment of auditor)
At each general meeting at which the accounts
are laid before the members, the company is
required to appoint an auditor to serve until
the next such meeting. KPMG LLP has agreed
to continue as the company’s auditor in respect
of the financial year ending 30 June 2015.
Resolution 17 (remuneration of auditor)
Resolution 17 authorises the Board to determine
the remuneration of the company’s auditor.
Resolution 18 (authority to allot shares)
At the AGM held on 19 September 2013,
shareholders gave authority to the Board,
which will expire on 18 September 2014, to allot
a maximum of £242,129,000 in nominal value of
Ordinary Shares and any securities convertible
into Ordinary Shares. Resolution 18 replaces the
authority granted in 2013 and would allow the
Board to allot, or to grant rights to subscribe for
or convert any securities into Ordinary Shares
up to an aggregate nominal amount equal
to £242,298,000 (representing 837,384,000
Ordinary Shares).
Alan JH Stewart
Appointed Non-Executive Director,
September 2014
Current external appointments: Chief Financial
Officer Designate, Tesco plc.
Previous relevant experience: Chief Financial
Officer, Marks & Spencer and AWAS; Non-Executive
Director, Games Workshop plc; Group Finance
Director , WH Smith plc; Chief Executive,
Thomas Cook UK.
Age: 54
Nationality: British
(Committees: 1, 3, 4)
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Diageo Notice of Annual General Meeting 2014
In respect of this aggregate nominal amount, the
Board confirms its intention to follow the provisions
of the Pre-Emption Group’s Statement of Principles
regarding cumulative usage of authorities of no
more than 7.5% of the issued Ordinary Share
capital (excluding treasury shares issued for cash)
within a rolling 3-year period without prior
consultation with shareholders. The Board will
continue to seek to renew this authority at each
AGM, in accordance with current best practice.
This amount represents approximately one-third
of the company’s issued share capital (excluding
treasury shares) as at 18 July 2014, the latest
practicable date prior to publication of this
AGM notice (the ‘Latest Practicable Date’).
The authority sought under this resolution will
expire at the earlier of 17 December 2015 and
the conclusion of next year’s AGM. The Board will
continue to seek to renew this authority at each
AGM, in accordance with current best practice.
This authority will expire at the earlier of 17 December
2015 and the conclusion of next year’s AGM.
The Board has no present intention to exercise
the authority sought under resolution 18, except
to satisfy options under the company’s share
option plans.
Resolution 20 (authority to purchase own
Ordinary Shares)
At the AGM held on 19 September 2013, the
shareholders granted authority for the company
to buy up to a maximum of 251,039,000 of its own
Ordinary Shares in the market.
As at the Latest Practicable Date, 242,068,532
Ordinary Shares are held by the company in
treasury (representing approximately 10% of the
total issued share capital (excluding treasury shares)
of the company).
Resolution 20 renews and replaces that authority
and would allow the company to buy back up to
251,215,000 Ordinary Shares (i.e. £72,689,000 in
nominal value) in the market (approximately 10%
of the issued Ordinary Share capital, exclusive of
treasury shares, at the Latest Practicable Date).
Resolution 19 (disapplication of pre-emption rights)
Resolution 19 would give the Board the authority to
allot Ordinary Shares (or sell any Ordinary Shares
which the company elects to hold in treasury)
for cash without first having to offer them to
existing shareholders in proportion to their
existing shareholdings.
The company had options to subscribe for Ordinary
Shares outstanding at the Latest Practicable Date
relating to 470,156 Ordinary Shares. This figure
represents approximately 0.02% of the issued
Ordinary Share capital (excluding treasury shares),
at the Latest Practicable Date and would, assuming
no further Ordinary Shares are issued, represent
approximately 0.02% of the issued Ordinary Share
capital (excluding treasury shares) if full authority
to purchase shares (both the existing authority
and that sought at this year’s AGM) was used.
This authority would be limited to allotments of
new Ordinary Shares or sales of treasury shares, for
cash, in connection with pre-emptive offers or to
allotments of equity securities to employees of
joint ventures in which the group participates, or
as the Board otherwise considers necessary, up
to an aggregate nominal amount of £39,846,000
(representing 137,711,000 Ordinary Shares), equivalent
to approximately 5% of the issued Ordinary Share
capital (including treasury shares) of the company
as at the Latest Practicable Date.
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Diageo Notice of Annual General Meeting 2014
Within the EU, it has been the company’s
longstanding practice not to make payments to
political parties and the intention is that this will
remain the case. However, the legislation is very
broadly drafted and may catch activities such as
funding seminars and other functions to which
politicians are invited, supporting certain bodies
involved in policy review, and law reform and
matching employees’ donations to certain
charities. The group made no donations to EU
political organisations and incurred no EU political
expenditure during the year. The group made
contributions to non-EU political parties totalling
£0.4 million during the year (2013 – £0.5 million).
The resolution sets out the lowest and highest
prices that the company can pay for the Ordinary
Shares (for each Ordinary Share, the lowest being
the nominal value of an Ordinary Share and the
highest being the higher of (i) 105% of the average
middle market quotation for an Ordinary Share as
derived from the London Stock Exchange Daily
Official List for the five business days preceding
the day of purchase and (ii) the higher of the price
of the last independent trade and the highest
current independent bid on the London Stock
Exchange at the time the purchase is carried out).
The authority will expire at the conclusion of next
year’s AGM or on 17 December 2015, if earlier.
Any buyback would be by market purchases
through the London Stock Exchange.
These were all made, consistent with applicable
laws, to federal and state candidates and committees
in North America, where it is common practice to
make political contributions. No particular political
persuasion was supported and contributions
were made with the aim of promoting a better
understanding of the group and its views on
commercial matters, as well as a generally
improved business environment.
Any Ordinary Shares so purchased would be either
held as treasury shares or cancelled. In the period
from 20 September 2013 to the Latest Practicable
Date, 7,069,795 Ordinary Shares have been
purchased and held as treasury shares under
the existing authority.
The Board would only authorise such purchases
after careful consideration, taking account of other
investment opportunities, appropriate gearing
levels, the overall financial position of the group
and whether the effect would be an increase on
earnings per share and in the best interests of
shareholders generally.
To avoid inadvertent infringement, the Board has
decided to continue to seek shareholders’ authority
for political donations and political expenditure in
the EU in case any of the company’s normal activities
are caught by the legislation. The authority sought
would be capped at £100,000. The authority will
expire at the conclusion of next year’s AGM or
on 17 December 2015, if earlier. The Board will
continue to seek to renew this authority at each
AGM, in accordance with current best practice.
Resolution 21 (political donations and political
expenditure in the EU)
Under section 366 of the Act, the company is
required to seek shareholders’ authority for any
political donations and/or political expenditure
made by the company in the EU. At the AGM held
on 19 September 2013, the Board was granted
authority to make such political donations and/or
incur such political expenditure, capped at £200,000.
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Diageo Notice of Annual General Meeting 2014
Additional information for those
entitled to attend the AGM
Resolution 22 (adoption of the Diageo 2014
Long Term Incentive Plan)
During 2013, the Remuneration Committee
undertook a review of the company’s executive
remuneration framework. The purpose of the
review was to simplify the existing incentive
arrangements and further align them with both
the interests of shareholders and the company’s
business strategy. A new long term incentive plan,
the DLTIP, has been developed following this review
to replace the existing Diageo 2008 Performance
Share Plan (‘PSP’) and the Diageo 2008 Senior
Executive Share Option Plan (‘SESOP’). Subject to
shareholder approval of the DLTIP, it is proposed
that no further grants will be made under the PSP
or SESOP. Awards under the DLTIP will be made
annually to Executive Directors in accordance with
the Directors’ remuneration policy set out in the
remuneration report. A detailed description of
the principal terms of the DLTIP is set out in the
Appendix to this AGM notice on pages 16 to 18.
A copy of the DLTIP rules is available for inspection
at the company’s registered office and at the offices
of Slaughter and May, One Bunhill Row, London
EC1Y 8YY, during normal business hours on any
business day until the close of the AGM and will be
available at the place where the AGM is being held
from 15 minutes prior to and during the meeting.
(1) Only holders of Ordinary Shares on the Register
at 6.00 pm on Tuesday, 16 September 2014
(or, in the event of any adjournment, the date
which is two days before the time of the
adjourned meeting) shall be entitled to attend
and/or vote at the AGM. Such shareholders
can vote in respect of the number of shares
registered in their names at that time, but any
subsequent changes to the Register shall be
disregarded in determining rights to attend
and vote.
(2) To be admitted to the AGM, shareholders are
asked to bring their admittance pass or Notice
of Availability card that they have received
through the post and be able to confirm their
name, address and unique investor code as it
appears on the Register (which can be found
on either your share certificate, dividend tax
voucher or similar documentation as issued by
the Registrar).
(3) Any shareholder attending the AGM has the
right to ask questions. The company must
cause to be answered any such question
relating to the business being dealt with at
the AGM but no such answer need be given
if (a) to do so would interfere unduly with
the preparation for the AGM or involve the
disclosure of confidential information, (b) the
answer has already been given on the company’s
website (www.diageo.com) in the form of an
answer to a question, or (c) it is undesirable in
the interests of the company or the good order
of the AGM that the question be answered.
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Diageo Notice of Annual General Meeting 2014
(5) Unless voting instructions are indicated on the
Form of Proxy, a proxy may vote or withhold
his/her vote as he/she thinks fit on the
resolutions or on any other business (including
amendments to resolutions) which may come
before the AGM. A vote withheld is not a vote
in law and will not be counted in the
calculation of the proportion of votes for or
against a resolution.
(4) Any shareholder is entitled to appoint one or
more proxies to exercise all or any of his/her
rights to attend the AGM and to speak and act
on his/her behalf. If a shareholder appoints more
than one proxy, each proxy must be appointed
to exercise the rights attached to a different
share or shares held by that shareholder. A proxy
need not be a shareholder of the company.
A Form of Proxy which may be used to make
such appointment and give proxy instructions
can be found on the company’s website
(www.diageo.com) or can be requested from
the Registrar at the address below. To be
effective, a duly completed Form of Proxy,
together with any power of attorney or other
authority under which it is signed or a notarially
certified copy of such power or authority, must
reach The Registrar, Diageo plc, Edinburgh Park,
5 Lochside Way, Edinburgh EH12 9DT or, in the
case of a proxy appointed electronically, the
electronic address specified for this purpose on
the company’s website (please see ‘Electronic
Voting’ on the home page of www.diageo.
com) by 2.30 pm on Tuesday, 16 September
2014 (or not less than 48 hours before the time
fixed for any adjourned AGM). Participants
in the company’s Employee Share Plans or
holders of shares in the Diageo Sharestore
should refer to note 9. To appoint a proxy
electronically you will need your unique
investor code. Please note that any electronic
communication that is found to contain a
computer virus will not be accepted. If two
or more valid but differing appointments of
a proxy are received in respect of the same
share for use at the same AGM, the one which
is last received (regardless of its date or the date
of its signature) shall be treated as replacing
and revoking the others as regards that share;
if the company is unable to determine which
was last received, none of them shall be
treated as valid in respect of that share.
(6) If you are an ordinary shareholder and wish
to attend the AGM, the return of the Form of
Proxy or the appointment of a proxy via the
electronic voting section of the company’s
website or via CREST will not prevent you
from attending and voting in person. In the
case of joint holders, any one holder may
vote. If more than one holder is present at
the AGM, only the vote of the senior will be
accepted, seniority being determined by the
order in which names appear on the Register.
(7) A shareholder must inform the company in
writing of any termination of the authority
of a proxy.
(8) CREST members who wish to appoint and/or
give instructions to a proxy or proxies through
the CREST electronic proxy appointment
service may do so in accordance with the
procedures described in the CREST manual
(available by logging in at www.euroclear.com).
In order for a proxy appointment made through
CREST to be valid, the appropriate CREST
message (a ‘CREST Proxy Instruction’) must be
properly authenticated in accordance with
Euroclear UK & Ireland Limited specifications
and must contain the information required
for such instructions, as described in the CREST
manual. The message must be transmitted
so as to be received by the issuer’s agent (ID
R015) by the latest time(s) for receipt of proxy
appointments as set out in note 4 above.
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Diageo Notice of Annual General Meeting 2014
For this purpose, the time of receipt will be
taken to be the time (as determined by the
timestamp applied to the message by the
CREST Application Host) from which the
issuer’s agent is able to retrieve the message
by enquiry to CREST in the manner prescribed
by CREST. After this time any change of
instructions to proxies appointed through
CREST should be communicated to the
appointee through other means. The company
may treat as invalid a CREST Proxy Instruction
in the circumstances set out in Regulation
35(5)(a) of the Uncertificated Securities
Regulations 2001.
CREST personal members or other CREST
sponsored members, and those CREST
members who have appointed a service
provider(s) should refer to their CREST sponsor
or voting service provider(s), who will be able
to take the appropriate action on their behalf.
CREST members and, where applicable, their
CREST sponsors or voting service providers
should note that Euroclear UK & Ireland Limited
does not make available special procedures
in CREST for any particular message. Normal
system timings and limitations will, therefore,
apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST
member concerned to take (or, if the CREST
member is a CREST personal member, or
sponsored member, or has appointed a
voting service provider, to procure that his/her
CREST sponsor or voting service provider(s)
take(s)) such action as shall be necessary to
ensure that a message is transmitted by means
of the CREST system by any particular time.
In this connection, CREST members and, where
applicable, their CREST sponsors or voting
system provider are referred, in particular, to
those sections of the CREST manual concerning
practical limitations of the CREST system
and timings.
(9) Participants in the company’s Employee Share
Plans and holders of shares in the Diageo
Sharestore should complete the Letter of
Direction section of the Form of Proxy.
Those who are ordinary shareholders and/or
participants in such plans and/or holders
of shares in the Diageo Sharestore should
complete both the Form of Proxy and the
Letter of Direction section. The Letter of
Direction must reach the Registrar (at the
address specified in note 4), or in the case of
a Letter of Direction completed electronically,
the electronic address specified for this purpose
on the company’s website (please see ‘Electronic
Voting’ on the home page of www.diageo.com),
by 2.30 pm on Friday, 12 September 2014. The
votes of employees or former employees of
the company will be taken to include their
Employee Share Plans and Diageo Sharestore
shares together with holdings in their own
name unless they notify the Registrar to the
contrary at least 48 hours before the AGM.
Holders of shares in the Diageo Sharestore
should contact the Registrar and request a
letter of admittance should they wish to
attend the company’s AGM.
(10)Any corporation which is a shareholder can
appoint one or more corporate representatives
who may exercise on its behalf all of its powers
as a shareholder provided that, if it is appointing
more than one corporate representative, it
does not do so in relation to the same shares.
14
Diageo Notice of Annual General Meeting 2014
(11) On arrival at the AGM venue, all those entitled
to vote will be required to register and
collect a poll card. In order to facilitate these
arrangements, please arrive at the AGM venue
in good time. You will be given instructions on
how to complete your poll card at the AGM.
(12)As soon as practicable following the AGM,
the results of the voting at the AGM and the
number of votes cast for and against and the
number of votes withheld in respect of each
resolution will be announced via a Regulatory
Information Service and placed on the
company’s website (www.diageo.com).
(13) A copy of this AGM notice has been provided
for information only to persons who have
been nominated by a shareholder to enjoy
information rights under section 146 of the
Act (‘Nominated Persons’). The statement of
the rights of shareholders in relation to the
appointment of proxies does not apply to
Nominated Persons. However, a Nominated
Person may, under an agreement between
him/her and the shareholder by whom
he/she was nominated, have a right to be
appointed as a proxy for the AGM or to have
someone else so appointed. If a Nominated
Person does not have such a right or does
not wish to exercise it, he/she may have a
right under such an agreement to give
instructions to the shareholder as to the
exercise of voting rights.
i.the audit of the company’s accounts
(including the Auditor’s report and the
conduct of the audit) that are to be laid
before the AGM; or
ii.any circumstance connected with an
auditor of the company ceasing to hold
office since the previous AGM at which
annual accounts and reports were laid in
accordance with section 437 of the Act.
The company may not require the
shareholders requesting any such website
publication to pay its expenses in complying
with sections 527 or 528 of the Act. Where the
company is required to place a statement on
a website under section 527 of the Act, it must
forward the statement to the company’s
auditor not later than the time when it makes
the statement available on the website. The
business which may be dealt with at the AGM
includes any statement that the company has
been required, under section 527 of the Act,
to publish on a website.
(15)A copy of this AGM notice and other
information required by section 311(A)
of the Act can be found at the company’s
website (www.diageo.com).
(16)Any electronic address provided either in
this AGM notice or any related documents
(including the Chairman’s letter and Form
of Proxy) may not be used to communicate
with the company for any purposes other
than those expressly stated.
(14)Under section 527 of the Act shareholders that
meet the threshold requirements set out in that
section have the right to require the company
to publish on a website a statement setting
out any matter relating to:
15
Diageo Notice of Annual General Meeting 2014
Appendix
(17)The company’s issued share capital at the
Latest Practicable Date was 2,754,221,154
Ordinary Shares, including Ordinary Shares
held as treasury shares. As at the Latest
Practicable Date, the company held
242,068,532 Ordinary Shares as treasury shares,
representing approximately 10% of the
company’s issued share capital (excluding
treasury shares) as at that date.
As at the Latest Practicable Date, the total
number of voting rights in the company
was, therefore, 2,512,152,622.
Summary of the Diageo 2014 Long Term
Incentive Plan
The principal terms of the DLTIP are set out below.
Details of how the DLTIP will be operated for
Executive Directors are set out in the Directors’
remuneration policy in the Diageo plc report
and accounts for the year ended 30 June 2014.
1Eligibility
(18)The Diageo plc report and accounts for the
year ended 30 June 2014 can be viewed at,
or downloaded from, the company’s website
(www.diageo.com) or a copy requested by
writing to the Registrar at the address specified
in note 4 or by calling +44 (0) 131 519 2090,
or by emailing [email protected].
Employees and Executive Directors of
the company, subsidiaries and associated
companies are eligible to participate in
the DLTIP.
2 Grant of awards
(19)Diageo encourages you to receive
communications and documents
electronically, by registering your email
address at www.diageoregistrars.com. You
will be sent an email letting you know that
your shareholder documents will be available
on the company’s website (www.diageo.com)
for you to view for download.
(20)For shareholder offers at Gleneagles, please visit
www.gleneagles.com/diageoshareholder.
(21)Warning to shareholders – please beware share
fraud or ‘boiler room’ scams, where shareholders
are called ‘out of the blue’ by fraudsters
(sometimes claiming to represent Diageo)
attempting to obtain money or property
dishonestly. Further information is available in
the investor section of the company’s website
(www.diageo.com) but in short, if in doubt,
take proper professional advice before
making any investment decision.
16
The Board, or in the case of Executive Directors
and the Executive Committee, the Remuneration
Committee (the ‘Committee’) will decide who
will participate in the DLTIP and how many
shares they may receive.
Under the DLTIP participants are granted
a right to receive shares in the company in
the future subject to them remaining in
employment and subject to the satisfaction
of any performance conditions. The right
(referred to as an award) can take the form of
rights to free shares, options to acquire shares
at an exercise price set at the time of grant
(which may be zero) or shares issued or
transferred at grant which are forfeited
to the extent the award lapses. When the
participant becomes entitled to the shares
the award is said to have vested.
Diageo Notice of Annual General Meeting 2014
Awards will normally only be granted within
42 days of the announcement of the company’s
results for any period or the annual general
meeting. No awards can be granted more
than 10 years after the DLTIP’s approval
by shareholders.
An award can be granted on the basis that
the participant will receive an additional
amount on vesting based on the dividends
paid on the number of shares in respect of
which the award vests or is exercised. This
may be paid in cash or additional shares.
3 Performance conditions
6 Retention period
The receipt of shares on the vesting of an
award may be subject to a performance
condition set by the Committee at the time
of grant which will normally be tested over
at least three financial years. Awards made
to Executive Directors of the company will
always be subject to performance conditions
as described in the Director’s remuneration
policy from time to time and, accordingly,
the performance measures will be subject
to shareholder approval.
An award can be granted on the basis that
some or all of the shares in respect of which
it vests must be held for a further period.
7Malus
The Committee can reduce or delay the
vesting of awards or reduce the shares
subject to a holding period in certain
circumstances, such as in the event of a
material performance failure or a material
misstatement of the accounts.
4 Individual limits
8 Leaving employment
If a participant leaves employment, their
award will normally lapse and any shares
will be forfeited.
But if the participant leaves for reasons
such as: disability, ill-health or injury, death,
redundancy, retirement, sale of his employer;
or in other circumstances if the Committee
allows, their award will continue in effect
and vest on the original vesting date, or if
applicable, at the end of the holding period.
Alternatively, if the Committee so decides,
the award will vest, or the shares will be
released, on leaving.
An award will only vest on or after leaving to
the extent that any performance condition is
satisfied at the date of vesting and unless the
Committee decides otherwise, the number
of shares in respect of which it vests will be
reduced to reflect the fact that they left early.
Awards in respect of any financial year are
subject to a limit of 500% of annual basic
salary. As awards may be made in the form of
market value options or free shares, the limits
are expressed in terms of performance share
equivalents where a market value option is
valued at one-third of a conditional award.
5 Vesting of awards
Awards will normally only vest to the extent
any performance condition is met. To the
extent the award vests, shares will be issued
or transferred to the participant or, in the case
of an option, the participant may exercise the
option for a period of up to 10 years from the
date of grant.
Instead of issuing or transferring shares, the
Committee can decide to pay a cash amount
equal to the value of those shares (less any
exercise price in the case of an option).
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Diageo Notice of Annual General Meeting 2014
9 Takeovers, reorganisations
Awards will generally vest early on a takeover,
merger or other corporate event. Alternatively,
participants may be allowed or required
to exchange their awards for awards over
shares in the acquiring company.
Where an award vests in these circumstances,
any performance condition will be tested to the
date of vesting and, unless the Committee
decides otherwise, the number of shares in
respect of which it vests will be reduced to
reflect the fact that it is vesting early.
Any shares issued following the vesting of
awards will rank equally with shares of the
same class in issue on the date of allotment
except in respect of rights arising by reference
to a prior record date.
Options will lapse, at the latest, on the 10th
anniversary of the date of grant or on such
earlier date as may be specified on grant.
12Amendments
The Committee can amend the DLTIP in any
way. However, shareholder approval will be
required to amend certain provisions to the
advantage of participants. These provisions
relate to eligibility, individual and plan limits,
the rights attaching to awards and shares,
the adjustment of awards on variation
in the company’s share capital and the
amendment powers.
The Committee can, without shareholder
approval, make minor amendments to
benefit the administration of the DLTIP, to
take account of a change in legislation or to
obtain or maintain favourable tax, exchange
control or regulatory treatment. They can also
amend any performance conditions without
shareholder approval if anything happens
which causes the Committee to consider
it appropriate to do so.
The company may also, without shareholder
approval, establish further plans based on
the DLTIP, but modified to take account of
overseas securities laws, exchange controls or
tax legislation. Shares made available under
such further plans will be treated as counting
against any limits on individual or overall
participation in the DLTIP.
10 Plan limits
In any 10-year period, not more than 10%
of the issued ordinary share capital of the
company may be issued or be issuable under
the DLTIP and all other employees’ share plans
operated by the company. In addition, in any
10-year period, not more than 5% of the
issued ordinary share capital of the company
may be issued or be issuable under award
under all discretionary share award plans
adopted by the company. These limits do not
include awards which have lapsed but will
include awards satisfied with treasury shares
as if they were newly issued shares so long as
required by the Association of British Insurers.
11General
The number or type of shares subject to
an award and/or any exercise price may be
adjusted to reflect a rights issue, demerger or
any variation in the share capital of the company.
Awards are not generally transferable (except
to personal representatives on death or with
the consent of the Committee) and are not
pensionable. Participants do not pay for
the grant of an award.
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Diageo Notice of Annual General Meeting 2014
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Diageo Notice of Annual General Meeting 2014
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